A week is a long time in politics

PETER VAN ONSELEN: On The Nation with David Speers, Joel Fitzgibbon, the Whip on your side of the Parliament, made the point that he felt that Labor needed to just be prepared to embrace the fact that the surplus was gone and that it needed to consider not having to have a surplus. Do you accept that?

ANTHONY ALBANESE: No, I don’t. The government’s been determined to return the Budget to surplus. We’ve shown in the past that we can make tough savings decisions. We’ve created space in the Budget, for example, to provide support and rebuild Queensland after the floods.

PETER VAN ONSELEN: So you’re confident that you will still deliver this surplus in May when the Budget’s handed down?

ANTHONY ALBANESE: Yes, we’re working hard to make sure that that can happen. I know I’ve been a part of the process, and we’ve recently brought down the mid-year economic forecast, and in that we had a range of measures that went through the Parliament in the last week. …

PETER VAN ONSELEN: But there’s also a lot of speculation, you know, about whether the government will achieve its surplus or not. You’ve got members – senior members of your own side saying that it should be prepared to give up on the surplus. You’ve got the latest monthly release of revenue figures showing that, I believe, revenue windfalls are down $1.8 billion in the last month alone – which is more than the surplus.

At the end of the day, when is the point going to come where the government is going to do what we all expect it do – and admit that the surplus is too hard, albeit perhaps for reasons outside of the government’s control? It looks like we are being baby-stepped towards that.

ANTHONY ALBANESE: No, if you look at what we’ve actually done and you look at the mid-year economic forecast which was just weeks ago, you’ll see what the government’s actions have been, rather than speculation about what might happen in terms of global economic forecasts.

Indeed, just this week the OECD brought down a report that once again heralded the Australian economy, indeed spoke about the Australian economy as the Iron Man of the global economy – that shows how strong we are going as an economy. We’re a government’s that’s produced lower unemployment, lower interest rates, lower spending as a proportion of GDP. All of the key economic indicators are very positive.

PETER VAN ONSELEN: And some economists would say, because of the strength of the Australian economy, it can afford to dip into a small deficit, given the nature of what is happening globally. But let me put it to you this way – because we can’t seem to find a minister that’s prepared to do more than slightly soften the rhetoric on whether the surplus is going to be achieved – if you had to walk through a door and your life depended on it, is the government going to deliver a surplus or is it going to fall into a small deficit in May?

ANTHONY ALBANESE: Well the government’s going to deliver a surplus. That’s our policy. That’s what we’ve been working towards. We’ve shown that we’ve been prepared to make appropriate cuts that don’t affect low and middle income earners, that provide that protection there. We’ve shown also we can make tough decisions without endangering that long-term economic growth – so you’ll notice we’ve continued to invest in infrastructure, because that’s about future growth, and it would be cutting off our nose to spite our face if we went down the road of just cuts for cuts sake.

That’s not what we’re about. What we’re about is strengthening the base of the Australian economy. We’ve done that through good macroeconomic management and also by being very deliberate about the cuts that we’ve made and the changes that we’ve made, all of which of course have been criticised by the Opposition. Look at the Opposition – when they’re overseas, Joe Hockey speaks about getting rid of the age of entitlement, but back at home we have never seen a saving that he was prepared to support.

94 Responses to A week is a long time in politics

As I’ve said many times before, Wayne Swan has never, and will never, deliver a surplus. The man is a fraud of the highest order. He has promised his ‘investors’ -the taxpayer- that he would return a profit, but like some grand Ponzi scheme, eventually reality catches up.

It was an abuse to my ears to have to listen to David Koch on 3AW Radio today about the budget. He told so many ‘mistruths’. He tried to pull the line about the spending and taxing as a % of GDP yet ignores the change in accounting that happened in 2008-2009 budget which ‘increased’ the size of the GDP, making the percentage of their taxes and spending look smaller. When saying that, he ignores the billions of dollars that LABOR has borrowed. He also says that most of the waste is not in the Government sector…Yeah right. He then states that the stimulus spending got Australia through the GFC when there is really no evidence whatsoever to suggest this. It is amazing that these so-called ‘financial experts’ can spew out such lies.

The News on multiple channels is now trying to state that the economists support the ALP’s decision. Absolutely not true. They support the decision to abandon because it was never going to happen. That does not mean that we should not have a budget surplus. There are piles of waste that could have been sought through and cut without harming the economy. For example, fixing up our problems with Immigration would save the budget a fair bit of money.

The urplus emphasis is killing us. Tax revenues have taken a nosedive. Look around you people. Small and medium businesses are hitting the wall. Is the answer to throw more public servants out of their jobs? Really? look at Spain and Greece now. Where is their unemployment following the austerity measures. How well are they doing.
The best thing not to cut spending in this climate.
As for soft monetary policy ie interest rates were so damn low for so long while this monstrous bubble was building in the US. The boom part of the cycle wasnt even noticed by the fed and monetary policy. What use is the fed if it misses a monster growing under its nose.
Now the monster is unemployment and there is no need for the ephasis on fighting inflation IMHO Stuff inflation. It isnt here and it isnt coming any time soon. Enuff playing politics over the Budget. If Abbott was in power now the sad reality is it wouldnt be any closer to surplus because tax income is downn). Thats because businesses are shutting their doors because not enough are buying. As them why not. By the time households pay for the raft of imaginative legislative imposts by governments of all shapes and sizes – they dont have much left (license fees, registration fees, compulsory insurance, training fees, parking fees, education fees, – add to that the large private organisations that now hit us up for energy costs, grocery costs etc

The way we are going isnt working and arguing about the budget is just like argfuing about boatpeople incessantly. Its boring and the budget is the source of the problem. Its the consequence.

Yeah right. He then states that the stimulus spending got Australia through the GFC when there is really no evidence whatsoever to suggest this.

Too right Andrew. One could argue that it is now driving our current malaise. The stimulus was always going to cause slower growth in the future as it was withdrawn and the unsustainable activity receded.
Another point to make is that it is expected revenue that has fallen. Treasury has overestimated nominal GDP growth AGAIN. What really has changed in the international situation lately? What is the.unexpected development that occurred? In reality nothing fundamental has changed. The media and economic charalatans like Chris Richardson are merely providing cover. It sickens me.

Alice, people have said that budget forecasts were too rosy for ages and that the surplus would not be achieved. How can you buy Swan’s bullshit. Tell me what has changed recently that has led to, in your words, ‘Tax revenues [taking] a nosedive’? The fundamentals haven’t changed.

If Abbott was in power now the sad reality is it wouldnt be any closer to surplus because tax income is down

Let’s compare the 11-12 budget with the current 12-13 Budget. GST revenue is up 4%, company tax 5.1%, other individual income taxes up 9.3%, Rent taxes up 18.8%, FBT up 5.1%, Excise tax up 3.9% and customs up 22.3%. The point of the matter is that if the Government was not so wasteful on issues like Immigration, the inflated public service spending and other stimulus projects which were simply a cash give away, we would have far less net debt and we would have delivered a budget surplus. Might I also add that our terms of trade are at record highs yet we can’t take advantage of that all, meaning that we are not delivering surplus budgets.

And on the off chance that Swan has not made clear just how irremediably stupid he is, in The Oz he is trumpeting that Abbott has finally read the judgement in the Ashby case.

A treasurer so breathtakingly assiduous in his dereliction, who even now is probably hunkered down in in the bowels of Treasury trying to memorise lines he doesn’t understand excusing his failure to do something else he didn’t understand, spouting off about the opposition leader failing in a responsibility he does not even have.

Swan is the sock drawer where all the nonsensical propositions and sentences that could possibly be formulated are discarded. “I’ll impoverish you until you are rich.”, “Our decreased vote is proof Australia’s confidence”.

If you doused Swan in petrol and held a match to him he would turn into a lamp post and there would be a flood in Bangladesh.

Andrew, dot
You are both right. Tax revenues have not ‘collapsed’.
Can one of the ALP apologists explain exactly what has changed, in terms of fundamentals?
Also, Gillard told us just few days ago the she deals in ‘facts’. The ‘facts’ being the MYEFO forecasts. Now she might tell us what the new ‘facts’ are…

What is really sad is that a big part of the debt and deficit is all the money pissed up against the wall building useless school halls. The school halls were part of the education revolution that was going to increase productivity so we could pay off the debt.

This week we learn that rather than seeing any improvement in our eduction performance we are falling behind the rest of the world.

I’m so sick of hearing about how these imbeciles “saved us from the GFC” I want to vomit. The Northern Hemisphere financial crisis barely touched us. All those billions (so diligently socked away by the Howard government)that they pissed away on electoral bribes would be pretty handy now that we’re looking down the barrel of a REAL recession. Alice, your posts simply astound me.

back in March the Treasury Boss was telling businesses that tax revenues had fallen 4% since the GFC. Plus the mining tax raised nothing at all in its first three months (the tax you put in for political reasons and then get bashed over the head by miners who can afford to pay – or at least keep more of their profit onshore rather than offshore).

No it did touch us and is still seeping in like rank swampwater. The quantitative easings in the US have sent our dollar too high plus its been a safe haven after the mess of US and Euro. If you think thats not affecting us I dont know how you come to that conclusion. Our budget is in deficit, unemployment is up, the weakening of the business sector is apparent in all but WA and the miners are expecting prices to fall…

Yesterday’s national accounts showed company tax revenue up 4.5 per cent over the first six months of the financial year. The May budget had forecast an increase of 29 per cent over the entire year, revised down in November to an increase of 21 per cent.

Mr Swan said company tax collections were increasing, but “not consistent with where we expected them to be increasing to”.

”They are already down on what we had forecast, of that there is no doubt,” he said.

Alice, the above is from your own link. Surely you aren’t this stupid…revenue is lower than expected. As Kohler pointed out on 7.30 though, actual revenue is up…expenditure is up more…

“We’ve created space in the Budget, for example, to provide support and rebuild Queensland after the floods.”
That is rubbish, they made most of us pay a flood levy to cover costs. What is wrong with some journalists, why wasn’t the flood levy mentioned when this was said by AA.

It is almost impossible to comprehend, for this long befuddled taxpayer, that the Labor Paaardy could put someone so palpably and manifestly stupid in charge of a $1T a year budget.

I simply shake my head, particularly every three months when I fill in my BAS Statement and remit the ever increasing slice of my income to this, the most incompetent government that I have seen in this country in my lifetime.

“Look around you people. Small and medium businesses are hitting the wall. Is the answer to throw more public servants out of their jobs? Really?”

Your cognitive dissonance is showing. How about you re-read those two statements?

What exactly do you mean by “more public servants”?

My small business is battling to keep up with last years’ sales. While I walk the pavement from customer to potential customer trying to drum up sales, no federal public servants are losing their jobs.

I want them to face the same harsh reality that I do – if I don’t make enough sales per week, I starve by the end of the year!

Right from the get-go, Abbott said Labor was dreaming if they thought they would produce a surplus. Abbott said before the election that gillard would introduce a carbon tax. He also said dismantling the Pacific Solution would be disastrous. Mr Relentless Negativity is right on the money. Labor just keeps spending the money.

Just like John Howard was before the 2007 election.
He told us it was bullshit that Rudd was a fiscal conservative. Bang on…
He said that the union dinosaurs would be back in control. Bang on…
He said if you change the government you change the country. My fucking word…

I’d be interested to know from Sinclair, Judith or anyone else on when is the official budget surplus/deficit known? It seems that Labor could not go to an early election with the surplus stuff up and current polls. That makes me think that they will have to stay on for a while. But if they go too late, the official budget figures will hurt them badly. That makes me think that they will go just before the official budget figures come out.

Its going to be so hard to get the Gov back into surplus. The wailing and gnashing of teeth by those who have come to depend on Guvmint money will be stupendous, and deeply felt. Talk about leaving a mess for the adults to clean up. Its not going to be pretty.

That makes me think that they will go just before the official budget figures come out.

Andrew my first thought was that this meant no early election, because the ‘surplus’ was to be a big selling point after the eofy. If they were going to go early, they wouldnt have to admit that the surplus was a con. Who knows.

Andrew, final budget outcome is released by end of September each year as per Charter of Budget Honesty Act…they should release monthly financial statements throughout the year which show their progress but I understand the finance minister has more discretion to delay these…

Janine, I was thinking they would try and hang on to their surplus promise and have an early election before the next budget, but now I think they will go close to full term. I reckon they are thinking the surplus promise has done its job and are betting the media will give them a free pass. I think they actually think they can win another term…

Thats the most reliable formula IT, but it takes the cohones to stand up against the ABC led media, and TA looks scared of them. I hope I’m wrong.

What does sadden me is that the Coalition does not have the cohones to go back and deregulate the labour market like in the Howard era. It does not have to be WorkChoices-esque but certainly the reforms that occurred when Reith and others were Industrial Relations minister.

Yup Andrew the Libs do seem to be scared of industrial/labour reforms. TA was crucified by the media over work choices a few years back, and he didnt seem to get much support from business and industry then. Business may regret it now, the Libs are gun shy.

Our budget is in deficit, unemployment is up, the weakening of the business sector is apparent in all but WA and the miners are expecting prices to fall…

What could it be? The GFC.

I know Alice has departed the thread.

But seriously, why can’t people work it out.

The GFC – such as it was – was 4 years ago now. 4 years of continuous economic growth.

The reason that small business is not profitable is for many reasons. They get burdened with stupid regulations (fair work act, superannuation increases, green tape) which make it harder to make a profit. The government embarks on ridiculous crusades like the carbon tax and ‘fighting global warming’ by implementing the RET. They spend billions on useless infrastructure like desal plants. All these flow directly to the hip-pocket in the form of increased water and electricity charges. As people have to pay these items, spending gets removed from the ‘discretionary’ (read: small business) into the ‘utilities’ column. Where it gets wasted on giant useless projects.

Then you get onto things like the live cattle ban, actively making life harder for farmers, builders- the list goes on and on.

And yet, through all this pain, through all this interference and screwing things up – the tax revenues keep climbing, year after year.

But, like the drunken spenders they are, it all just flies through Labors fingers as they pay for grand reports and enquiries, destined to sit on the shelf. They set up ridiculous entities like the NBN, which is just a conduit for cash to Labor mates.

The entire problem of low tax take is caused directly by the government screwing everything up, and making people earn less money, make less profits and generally just say ‘stuff it, I’m giving up’. Every single person I know who is an investor is just sitting on the sidelines, waiting for things to get better.

As Abbott says ‘there is nothing wrong with this country that a change in government woldn’t fix’.

I hope I can believe him. He needs to just get in there and tear it all apart. Take it back to the settings in 2007. Things would be so much better now if we still had that in place. Nothing this government has done in 5 years – nothing – has been worthwhile or a success.

“I want them to face the same harsh reality that I do – if I don’t make enough sales per week, I starve by the end of the year!

Get real, Alice.”

John A it is my understanding that lots of public servants have been laid off at NSW level already. Whats the good of both them and you walking the pavements trying to drum up business? Im not saying keep them all in their jobs but Im not saying kick them all out of their jobs as well in this climate – what point to that?

brc, the fact that businesses don’t know what this mob will do next week,let alone next year is making them feel nervous and hesitant. Would you bother to invest, expand and employ if the government could turn around and crush your business model tomorrow?
The problem is that the government makes decisions like a 14 year old girl decides which celebrity to fancy this week. One minute they will lay down their life for a pash from Harry Styles, the next week it is 1D who?

Im not saying keep them all in their jobs but Im not saying kick them all out of their jobs as well in this climate – what point to that?

Alice, there is never a good political time to cut back, except early in the election cycle. But it just has to be done, or else you may as well vote Labor.

The problem is that it is never going to be easy to move people from the public service to the productive economy. Workers must upskill or retrain, they have to get out of their comfort zone, and learn to live with uncertainty and even some fear. They deserve a bit of sympathy, but tough love is more appropriate.

They have existed in this cloistered nanny nest for so long they have forgotten they have wings and can fly.

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